The modern-day gold rush of oil companies and contractors converging on western Canada’s oil-sands markets is bogging down as high materials costs and outstripped labor resources force project delays and budget overruns.
“It is an overheated environment in Alberta now,” says Bill Wall, a petroleum market analyst for Canada’s National Energy Board, a Calgary-based oil regulatory agency. “The rapid increase of construction materials costs due to global issues and the lack of availability of project managers and others is seriously affecting the market.” Construction costs in the region have soared 40% to 60% in the past two years, causing “a number of project delays,” he explains.